Playing the Kinect with someone next to you like what's displayed in that picture really sucks. At E3, there was a mini-game collection on display. One of the games had us playing as a quarterback and these kids would try to tackle you, and to avoid being tackled, you had to literally jump out of the way. My natural inclination was to jump to the left, but the douchebag that I was playing with was right there, so I always got hit because jumping to the right wasn't natural to me. There was another "whack-a-mole" type game that had us hitting and stomping on things on the screen.
The games weren't anything I'd ever pay to play, but they were a good lesson on just how restrictive actually moving in the camera's space with another person next to you can be. I was constantly worried about hitting the other player.